Time Warner to cut AOL loose

The era of one of the worst corporate mergers in recent history will soon be over. Time Warner has announced plans to separate AOL from the company. That news is quite a flip flop for AOL considering it was AOL who originally purchased Time Warner only a short time ago.

Clearly, the glory days of AOL are long gone and so is Time Warner’s desire to be affiliated with the struggling Internet company. Once the separation has been completed, AOL will be a completely independent and publicly traded company. Time Warner has some house cleaning to do before it can spin-off AOL, though.

Currently, Time Warner owns 95% of AOL with another 5% owned by Google. In the third quarter of this year, Time Warner plans to buy Google’s 5% stake. This will give Time Warner shareholders full ownership of AOL once it is spun off.

Boy, this has been a long time coming. I don’t think I have ever seen such a disastrous merger between companies. Some of the warning signs were there at the beginning, though.

First of all, at the time of the merger AOL was primarily an Internet service provider which provided dial-up service to subscribers. How it made sense to allow them to purchase Time Warner, a media powerhouse, I will never know. Clearly, there must have been some serious out-of-the-box thinking by Time Warner and AOL board members when the merger was approved.

There’s one risk when thinking out-of-the-box, though. Sometimes you get too far away from the original box and begin to wonder what the heck you were thinking. That’s exactly what happened to Time Warner and AOL.

You can bet there are a number of Time Warner shareholders who are breathing a sigh of relief at this news. Honestly, I think this move is good for AOL as well. It allows AOL to focus on itself and possibly rebuild into a serious competitor when it comes to online services and ad-based revenue.

Speak Your Mind

Rob

Why couldn’t it be before they let AOL completely ruin Cartoon Network? Seriously, their current “Cartoons are for kids” mentality has destroyed it.

Bailey

You can blame AOL for a lot of things. But really… Cartoon Network? I worked at AOL before and after the merger. They had nothing to do with ANYTHING that was going on in the rest of the business. Which is one of the reasons why things went south. AOL had this picture that they were buying all of this great content that they could provide online and they ended up with a bunch of infighting companies with no desire to cross revenue streams.

Sprint

I think AOL should improve itself.It doesn’t give it’s customers reliable isp’s and they are disconnecting every so often.Why not give the customer a singel isp to improve service thats why I left so many years ago.